Kozmo.com Closes; 1,100 Laid Off

Kozmo.com, the Internet company that had hoped to revolutionize the delivery business, closed its doors Wednesday and said it will liquidate its operations, furloughing all 1,100 of its workers.

The privately held New York-based Kozmo.com had been trying to attract a buyer in recent weeks and was in negotiations with Camarillo-based PDQuick.com. Both companies deliver food and liquor to customers in Los Angeles and Orange counties. But the talks broke off this week when funding for the deal failed to materialize, Kozmo.com sources said.

Kozmo.com’s Web site was not running Wednesday afternoon, and employees were told to come in to work at 10 a.m. today to receive severance checks. The company operates two warehouses in the Los Angeles area.

Known for its fleet of orange-suited bicycle delivery people, Kozmo.com was launched in 1997 with the promise of free delivery of products ranging from candy, books and CDs to electronics and luxury gifts.

But after an ambitious roll-out, it laid off workers and canceled plans for a $150-million stock offering.

Kozmo.com shuttered its San Diego and Houston operations in January and said earlier this month it would cut 90 jobs in its third round of layoffs since August 2000.

Last month, Kozmo also announced the end of its five-year, $150-million deal to place rental movie drop-off boxes inside Starbucks stores.

Amazon.com, venture capital firm Flatiron Partners and Starbucks were among its funders.

Reuters was used in compiling this report.